Limited liability: Difference between revisions
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The restriction of an investor's potential losses to the amount invested. Without the privilege of limitation, investors would have unlimited liability for a company's debts. | The restriction of an investor's potential losses to the amount invested. Without the privilege of limitation, investors would have unlimited liability for a company's debts. | ||
The option of limited liability is one of the important advantages of incorporation. | The option of limited liability is one of the important advantages of incorporation. | ||
Revision as of 23:19, 9 December 2016
The restriction of an investor's potential losses to the amount invested. Without the privilege of limitation, investors would have unlimited liability for a company's debts.
The option of limited liability is one of the important advantages of incorporation.
Less commonly in the commercial context, but often used for social or public interest bodies, a company member's liability may alternatively be limited to an amount guaranteed by the member.
